What everyone is missing is we are in this mess because of inadequate democracy within the corporate world.

How is it in the shareholders interest that bonus payments could be made to executives on relative performance without the qualifier of a positive return ?

How is it in the interest of shareholders that their companies buy derivatives where the risk analysis is conducted by firms paid by the seller of the derivative?

Why do we have a taxation system that rewards high levels of debt for investment?

Why do unitholders in managed funds or superannuation not have a direct say at AGMs proportion to their funds shareholdings in the corporation?

Great article.
Jon J. If it was pure capitalism then the banks would have failed by now and we would have needed massive government intervention: Effectively a new State bank. Would you prefer this?
"too big to fail" should only apply to governments, or it is just corruption in the form of charity to the wealthy.
Democracy and transparency in business would help too. the "accountants" have done well in making nothing accountable. Auditors audit the same companies they fiddle the books for.

Ozandy,

I'm not fully convinced about Banks being too big to fail. While shareholders can loose equity, a failing Bank would be just dismembered and the parts swallowed-up by more nimble and more prudent rivals.

Under free markets it is role of the unfit to go under, so the more capable survive to better serve the Market

It has been too much like a return to the Roaring Twenties.

Which as a growing lad I remember so much with the very short skirts and the loosely legged panties.

It has just been the same routine, purely just brash care-free-ness with too many business executives acting like mugs putting too many bets on nags at a 100 to 1.

(a)Dear Dr. Cumes,

Yours is another lesson in history and an accurate diagnosis of a patient in trouble.

The Economy lies wounded in a field where the battle to denude the majority of Australian of their wealth and dignity rages.

It probably was the richest country in the world.

A country in which public records were open for all to see, where the Obituaries of prominent citizens published the import of their estate, where the tax office from time to time received money from anonymous senders, ‘conscience money’ was called.

Those were the riches of our country. Riches gone; squandered!

We can remember them with nostalgia but that’s all.

From now on forests of paper filled with rules and regulations and threat of penalties, the paraphernalia that politicians and lawyers are made of, may make of this country an English boarding house with all don’t this and don’t that and six penny gas meters, and have armies to enforce the rules, but without moral compulsion, health wont return to our patient.

Not that the poor people have no decency. We remain great. Our discipline in the face of the Victorian water crisis, our generosity towards the victims of natural tragedies and those issued from ignorance and carelessness of politicians, is proof of our nobility

(b) Dear Dr. Cumes

What worries is the arrogance of those to whom our politicians have sold our power; Bankers, Estate agents, Media barons, Merchants, Industrialists, Accountants, Lawyers, Do-gooders, Corporations of all sorts, from universities to refuse management, these de facto Lawmakers whose power they use to exact their cut and insult our intelligence, every day.

The egotism, the greed, the corruption is in these morally destitute charlatans.

Your diagnosis is right Dr. Cumes, but you have not pondered long enough on the etiology of the malaise.

Privilege!

It has come to us from the Magna Carta, from monarchic England, from Imperial England.

The other day an Australian High Court Judge rolling his tongue talked of tradition. What tradition? Whose tradition?

Westminster says the Politician. As if those stones and those bells were around the corner

Punishment! Prisons! In the third Millennium?

How hard for one who has lived close to a quaint republic in Europe; San Marino. Crime? Yes. Judges? Yes. Vengeance? No. Prison? No. Politicians? Non existent.

Dear Mr. Cumis, I admire you for your historical sense and magisterial prose and I admire those who shoeless and undernourished went to the same State school frequented by that judge. I know their history. It kept then from arrogance.